Reason Foundation

FasTracks to Nowhere: Denver's Decade-Old Boondoggle

Denver’s Regional Transportation District (RTD) has been forced to reschedule a telephone town hall meeting that was intended to discuss the future of its Northwest light rail line with local residents; RTD had given out an incorrect phone number to participants. This latest blunder is, unfortunately, all too representative of how the FasTracks project has proceeded thus far.

Mismanagement, unwarranted optimism and a consistent failure to plan for foreseeable contingencies have led FasTracks down the road towards insolvency and incompletion, leaving stakeholder communities with a choice between losing access to the system they paid for or ponying up even more in new taxes. This is not the transit system Denver had bargained for.

When approved by voters in 2004, RTD was expected to build 122 miles of light rail over the course of 12 years for $4.7 billion. To date, only 40 percent of the system, and only one complete line, has actually been constructed, about 75 percent of the way through the initial timeline. Its budget has ballooned 57% to $7.4 billion and because of massive cost overruns and revenue shortfalls, RTD does not expect the project to be completed until at least 2044, if ever.

In fact, it might never be finished, unless RTD gets new funding from… somewhere. It certainly won’t be from Denver taxpayers—they’ve steadfastly rejected proposals to double the sales tax increase they approved in 2004 to close the $2+ billion funding gap.

The project is a case study in how expensive transit mega-projects can go sideways. Many of FasTracks’ problems can be traced back to flaws in its original proposal: RTD didn’t secure rights of way for its corridors or obtain realistic cost estimates of acquiring them before submitting the budget to voters. When it pitched the plan the agency assumed that sales tax revenue would increase 6 percent annually, from 2004 to 2025—an unrealistic forecast that never materialized.

Before ground had even been broken in 2007, RTD announced that FasTracks was already a billion dollars over its original budget. Cost overruns would continue to grow to over $2.3 billion during the next few years Modifications to the plan approved by voters, including changes in project scope, new safety requirements and higher land costs, and from increases in the cost of construction materials led to these overruns. By 2009, the North Area Transportation Alliance had concluded that, “[FasTracks is] floundering with a financial plan that lacks credibility and a series of incremental decisions that are producing disjointed transit segments.”

The 41-mile Northwest Rail Line in particular (the subject of last week’s abortive town hall meeting) has been subject to skyrocketing costs, nearly doubling from an estimated total cost of $894 million to over $1.7 billion. Three of the northern counties that would be served by the line have already contributed $243 million in taxes to FasTracks, but they won’t see even a 6-mile segment of their line completed until 2016. At the moment the full track isn’t expected to be completed for another three decades.

Currently, FasTracks also includes funding for 17 miles of Bus Rapid Transit on two HOT lanes on U.S. 36 between Table Mesa Drive and the I-25 Express Lanes. One proposed solution to the continuing problems of the Northwest corridor is to replace most of that route, with BRT. This would dramatically reduce the cost of the line without forcing the community to give up its access to transit. The U.S. 36 BRT/HOT lanes project will cost only about $10.5 million per mile, while being subsidized by toll revenue from other vehicles using the lanes. By contrast, the Northwest Rail Line will cost over $40 million per mile and never recoup its capital costs.

As communities along the corridor debate making changes to the project, they should consider that proven, affordable rapid transit is available in the form of BRT for a fraction of the cost of light rail. Best of all, because its capital costs can be partially offset by automobile user fees, it could actually be built now, without raising taxes or waiting decades for funding to appear.

A public-private partnership to build and operate the line would be an effective way to shield justifiably skeptical taxpayers from the risks inherent in these kinds of transit projects. It would also reduce automobile congestion on the route with HOT lanes and maintain RTD’s commitment to provide fast, reliable transit service to the northern Denver metro region.